FSB: Guidelines on Advertising and Marketing

In the light of an increase in practices relating to advertisements, brochures and similar communications that are contrary to section 4(3) of the Long-term and Short-term Insurance, steps aimed at addressing this were announced at the FSB’s recent Regulatory Seminar.

An information letter is being drafted to provide guidance to insurers on the interpretation and application of section 4(3). This will in all likelihood follow the pattern of recent interventions concerning binder agreements and causal event charges. A draft information letter is published, calling for input from the industry, followed by feedback, and the eventual publication of a directive.

The information letter will reflect the manner in which the Registrar will apply the relevant sections of the Act and prevent different interpretations and application of section 4(3) by the industry.

The following general principles will apply:

  • accuracy and truthfulness
  • clear identification of the insurer
  • disclosure principles
  • preventative and remedial measures

Principles which will apply to specific practices will include:

  • White labelling
  • Comparative marketing
  • Value judgments or subjective assessments by an insurer (“puffing”)
  • Endorsements
  • Cash-back bonuses

Addressing the recent proliferation in cash incentives, in particular, will no doubt come as a relief to many intermediaries who felt that they were at a disadvantage as a result of these offers by direct insurers.

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